Our top tips for using credits cards intelligently — and not going into debt!
1. Learn to think of credit card purchases as REAL purchases — just because it’s plastic doesn’t mean it’s not real money. The more you can cultivate this mindset, the less issues you will have with spending money you don’t have. Keep a running tally in your head of your bank account’s contents. When you make a credit card purchase, mentally deduct that purchase from your bank account. Getting low? Stop spending, just like you would if you were operating with cash. If this is difficult for you to do in your head, keep track in a notebook or in a notes app on your phone. You probably won’t have to do this indefinitely — just until you can change your mindset about spending with plastic.
2. Use some of the available money technology to stay on budget Struggling with tip #1? Use technology to your advantage. Most likely your credit card’s app offers a variety of automated features. You can probably set up auto-pay, which will definitely serve as an incentive to not spend more than the contents of your account, as overdraft fees are no fun. You might also be able to set up an alert for when you hit a certain balance amount. If you’re struggling with staying on budget more generally, you might want to check out the Mint.com app. This app allows you to set alerts for when you hit certain amounts in different categories of your budget (i.e. “hey dumby, you’ve exceeded your monthly grocery budget by x amount).
3. Make sure you’re getting those rewards, rewards, rewards! If you’re spending money anyway, there is no reason to not use a credit card (assuming you’re following tip #1!) and get something back for your purchase, whether its points, airline miles or cash back. There are also sometimes sweet bonuses, like access to priority lounges in airports. Check out the Real Talk video to see which rewards programs we use, and why.
Watch the video above for some more real life credit card tips 🙂